8/9/2004 Revision 0.1 Author: Philip Larson 703.798.5244 (tel) Torts II: Outline Disclaimer: These notes and outlines are provided asii without any warranty as to their correctness, completeness, or quality. They are not meant to be a substitute for your own efforts. You may copy and forward this document as long as you do not alter its contents. Torts II: Outline Philip Larson Page 2 Table of Contents 1. TORTS II: OUTLINE........................................................................................................... 3 1.1 DUTY............................................................................................................................ 3 1.1.1 DUTY GENERALLY................................................................................................ 3 1.1.2 FAILURE TO ACT.................................................................................................... 3 1.1.3 MENTAL SUFFERING ............................................................................................ 4 1.1.4 UNBORN CHILDREN.............................................................................................. 5 1.1.5 PRIVITY OF CONTRACT ....................................................................................... 5 1.1.6 PURE ECONOMIC LOSS......................................................................................... 5 1.2 DAMAGES .................................................................................................................... 6 1.2.1 CATEGORIES OF DAMAGES ................................................................................ 6 1.2.2 PERSONAL INJURIES............................................................................................. 6 1.2.3 PUNITIVE DAMAGES............................................................................................. 7 1.3 WRONGFUL DEATH AND SURVIVAL .................................................................... 7 1.3.1 WRONGFUL DEATH & SURVIVOR..................................................................... 7 1.4 DEFENSES IN NEGLIGENCE..................................................................................... 8 1.4.1 CONTRIBUTORY NEGLIGENCE .......................................................................... 8 1.4.2 COMPARATIVE NEGLIGENCE............................................................................. 9 1.4.3 ASSUMPTION OF RISK........................................................................................ 10 1.4.4 STATUTE OF LIMITATIONS ............................................................................... 11 1.4.5 IMMUNITIES.......................................................................................................... 12 1.5 PRODUCTS LIABILITY (PL) .................................................................................... 12 1.5.1 INTRODUCTION.................................................................................................... 12 1.5.2 NEGLIGENCE ........................................................................................................ 12 1.5.3 WARRANTY........................................................................................................... 13 1.5.4 STRICT LIABILITY ............................................................................................... 14 1.5.5 DESIGN DEFECTS................................................................................................. 15 1.5.6 DUTY TO WARN................................................................................................... 16 1.5.7 WHO MAY BE A DEFENDANT........................................................................... 17 1.5.8 DEFENSES ON P’s CONDUCT............................................................................. 17 1.5.9 EXPERT TESTIMONY........................................................................................... 17 1.6 NUISANCE.................................................................................................................. 19 1.6.1 NUISANCE GENERALLY..................................................................................... 19 1.6.2 PUBLIC NUISANCE .............................................................................................. 19 1.6.3 PRIVATE NUISANCE............................................................................................ 19 1.7 VICARIOUS LIABILITY............................................................................................ 22 1.7.1 EMPLOYER-EMPLOYEE RELATIONSHIP ........................................................ 22 1.7.2 INDEPENDENT CONTRACTORS........................................................................ 23 1.8 INVASION OF PRIVACY.......................................................................................... 23 1.8.1 PRIVACY................................................................................................................ 23 1.9 MISUSE OF LEGAL PROCEDURE........................................................................... 24 1.9.1 MISUSE OF LEGAL PROCEDURE ...................................................................... 24 1.10 INTERFERENCE W/ADVANTAGEOUS RELATIONSHIPS................................. 25 1.10.1 INTERFERENCE W/ADVANTAGEOUS RELATIONS................................. 25 1.11 MISREPRESENTATION (“DECEIT”)....................................................................... 27 1.11.1 INTENTIONAL MISREPRESENTATION........................................................ 27 1.11.2 NEGLIGENT MISREPRESENTATION............................................................ 29 1.12 DEFAMATION............................................................................................................ 30 1.12.1 DEFAMATATORY COMMUNICATION......................................................... 30 1.12.2 LIBEL vs. SLANDER......................................................................................... 31 Torts II: Outline Philip Larson Page 3 1. TORTS II: OUTLINE 1.1 DUTY 1.1.1 DUTY GENERALLY A. Concept: Generally, a person owes everyone else with whom he comes in contact a general “duty of care.” Normally, this duty is to behave with the care that would be shown by a reasonable person. Howevver, there are several situation in which D owes P less than this regular duty. Most important: 1. D generally has no duty to take affirmative action to help P; 2. D generally has no duty to avoid causing unintended mental suffering to P; 3. D has no duty to avoid causing pure economic loss to P in the absence of more tangible types of harm (like physical injury). B. Two theories 1. Moral Theory: duty exists b/c you should act a certain way to your fellow humans. 2. Utilitarian (L&E) Theory: duty is a buzz word to cut off liability where it is no longer efficient. 1.1.2 FAILURE TO ACT A. No general duty to act: A person generally cannot be liable in tort solely on the grounds that she has failed to act. a. No duty to protect or give aid: This means that if D sees P in danger and fails to render assistance, D is not liable for refusing to assist. i. [X: Osterland v. Hill – P rents canoe to drunk who drowns. RULE: no duty to give aid even when it cost you almost nothing] ii. [H.R. Moch Co. v. Rensselaer Water Co – P sought recovery from D water supplier for not suppliers water to put out a fire in his warehouse. RULE: party who is in no contractual or special relationship to another may not be held liable for refusal to aid the other.] B. Exceptions: There are a number of commonly-recognized exceptions to the “no duty to act” rule: a. Business or University Premises: In most courts, whoever maintains business premises must furnish warning and assistance to business visitor. i. A store owner has the duty to rescue a person in peril if the instrumentality causing the injury is under the control of the owner. 1. [L.S. Ayres & Co. v. Hicks – 6 yr old caught in escalator at D’s store. ] ii. A contractual relationship may impose a duty to act, resulting in liability for failing to act. [H.R. Moch Co. v. Rensselaer Water Co] iii. Exception: RULE: A university has no duty to control the private lives of its students. 1. [Hegel v. Langsam – parents sue University for failing to prevent student associating with criminals and doing drugs.] b. D involved in injury: If danger or injury is due to D’s own conduct, or an instrument under D’s control, D has the duty of assistance. i. Store owner has the duty to rescue a person in peril if the instrumentality causing the injury is under the control of the owner. 1. [L.S. Ayres & Co. v. Hick – 6 yr old caught in escalator at D’s store.] c. Co-venturers: If P and D are engaged in a common pursuit. E.g. camping trip, jog, etc. d. Assumption of duty i. Preventing assistance to others: D is especially likely to be found liable if he begins to render assistance, and this dissuades others from helping P. Torts II: Outline Philip Larson Page 4 1. Misfeasance: [example: D stops to help an injured pedestrian, and others decline to help thinking it has been taken care of, D can’t then abandon helping. ] ii. Mere promise: courts are split on this. Traditionally, no liability, however many modern courts would count this as making D liable. e. Duty to control others i. Special relationship 1. Spouse: A spouse who has actual knowledge or a special reason to know of the likelihood of his or her spouse engaging in sexually abusive behavior against 3rd party has duty to take reasonable steps to prevent or warn. a. [J.S. and M.S. v. R.T.H – wife of pedophile sued for failing to protect neighbor children from sexual abuse by husband] 2. Therapist: A therapist has a duty to exercise reasonable care in controlling the harmful conduct of a patient or in warning others about the dangerous propensity. a. [Tarasoff v. Regents of University of California – P (parents of decedent) brought action against therapists for failing to warn of patient’s intentions to kill daughter] 1.1.3 MENTAL SUFFERING A. Mental Suffering & Physical Impact: If D causes an actual physical impact to P, D is liable for the physical and emotional or mental consequences that naturally flow from it. These mental suffering damages are called “parasitic” because they attach to the physical injury. B. Mental suffering w/o physical impact: Where there is no physical impact or direct injury to P, courts limit P’s right to recover for mental suffering caused by negligence. a. No Physical symptoms: Nearly all courts deny recovery when there is no physical impact and no physical symptoms of the emotional distress. i. Exceptions: Funeral homes handling corpses and negligence from telegraph companies in wording messages. ii. Abandoned: 6 states including CA and NY have abandoned the rule that you can’t recover for negligent infliction of purely mental harm. iii. The “at-risk” plaintiff: If P, by virtue of his exposure to some substance, suffers an increased likelihood of a particular disease, P generally can’t recover for purely emotional harm. b. Physical Injury w/o Physical Impact: Where D’s negligence physically endangers P even though there is no physical impact on P but P suffers emotional distress with physical consequences (e.g. frightened into having a miscarriage), nearly all courts allow recovery. Impact requirement abolished in MAJORITY of courts. i. [Daley v. LaCroix – P homeowners sue D car driver when D’s negligent driving causes explosion on P’s property. P suffers physical injury from the distress. RULE: P who suffers physical injury from emotional stress caused by D’s negligence may recover, even w/o physical impact on P] c. Third persons: If P suffers emotional distress (w/o physical impact) based on fear or grief about danger or harm to third persons, court are split. Need to prevent open-ended liability. Some say it is based on “zone of danger”, others “close relatives” and others to “foreseeable victims.” i. Zone of Danger – if P was in the zone of danger, most courts allow recovery due to distress caused by injuries to 3rd party. Torts II: Outline Philip Larson Page 5 ii. Close relative – a number of states, probably a minority, say that if P observes the danger to X and X is a close relative, P may recover for mental suffering. 1. [Thing v. Lachusa – P mother sues D driver for emotional distress when D ran over P’s car. RULE: parent whose child is struck by negligent driver cannot recover for ED if they did not witness the event] Court says she could have recovered if 1. close relative, 2. present at scene of injury; 3. suffers severe emotional distress. iii. Foreseeability: Limit to foreseeable victims. Dillon. 1.1.4 UNBORN CHILDREN A. Modern View: In most jurisdictions, no duty of care is owed to an unborn child. However, most courts have rejected view that an infant injured pre-natal could never recover if born alive. Today, it varies: a. Child born alive: If the child is eventually born alive, nearly all courts allow recovery. b. Child not born alive: Courts are split about this. i. Common Law -No duty: 1. [Endresz v. Friedberg – P (pregnant woman) brought wrongful death action against car driver for still-born babies. RULE: parents of stillborn child could not maintain a wrongful death action against the person causing the death.] ii. Modern View: some Ct’s allow wrongful death actions for unborn children. c. Wrongful life: no cause of action for wrongful life. i. [Procanik by Procanik v. Cillo – RULE: infant may not file wrongful life claim to recover damages for diminished childhood and pain and suffering] 1.1.5 PRIVITY OF CONTRACT A. General rule: a person who is not a party to a contract cannot recover damages in tort resulting from a breach of the contract, unless the contracting party undertook a public duty to act. a. [Winterbottom v. Wright – coach driver (D) sued coach manufacturer (P) for injuries when coach broke; RULE: D had no duty to P b/c there was no privity. No contract, D can’t sue.] i. Note: this has slowly been relaxed as Am. Ct’s carve out exceptions. [MacPherson v. Buick Motor Co. – below (getting rid of privity requirement)] b. [H.R. Moch Co. v. Rensselaer Water Co – P sought recovery from D water supplier for not suppliers water to put out a fire in his warehouse. RULE: No privity, no liability for not providing aid. Majority still says when there is nonfeasance, no liability to 3rd parties.] c. [Clagett v. Dacy -An attorney cannot be liable to a person who had no contractual relationship with him and who is not an intended beneficiary of the representation] B. Exceptions: a. Dangerous Product: When D manufactures a product that can be dangerous, knowing the product will be used by people other than original purchaser, manufacturer can be liable to anyone injured, even if they aren’t in privity. i. [MacPherson v. Buick Motor Co. – auto purchaser sued Buick for negligently failing to inspect vehicle; RULE: manufacturer owed duty to remote purchasers. They were foreseeable.] ii. IMPORTANCE: from MacPherson on, courts universally held that manufacturers have a duty of care to foreseeable victims of their negligence. 1.1.6 PURE ECONOMIC LOSS A. Traditional Rule: Where D causes physical injury or property damage to X but only pure economic loss to P, P may not recover. There must be some actual injury to person or property. a. Rationale: Fear of open-ended liability Torts II: Outline Philip Larson Page 6 i. [Louisiana ex re. Guste v. M/V Testbank – maritime accident resulted in closure of fishing lanes, fisherman who are affected cannot recover damages. RULE: P cannot sue for pure economic loss without damage to property or person] B. Modern Approach: Most modern courts relax the no-liability rule. They are most likely to award recovery where: a. Injury to P was relatively foreseeable b. Relatively few P’s would be permitted to sue if liability were found c. D’s conduct is relatively blameworthy 1.2 DAMAGES 1.2.1 CATEGORIES OF DAMAGES A. Nominal Damages: awarded in recognition that a legal injury has occurred but not intended to compensate the injury. B. Compensatory Damages: those that directly stem from tortious act a. Past Pain [Anderson v. Sears, Roebuck & Co.] b. Future Pain [Anderson v. Sears, Roebuck & Co.] c. Future Medical Expenses [Anderson v. Sears, Roebuck & Co.] d. Loss of Earning Capacity [Anderson v. Sears, Roebuck & Co.] e. Permanent Disability [Anderson v. Sears, Roebuck & Co.] C. Punitive Damages: intended to punish tortfeasor and set an example (deterrence) rather than compensate the victim. 1.2.2 PERSONAL INJURIES A. Maximum Recovery Rule: trial court may review damages to determine whether it exceeds the maximum amount which the jury could reasonably award a. [Anderson v. Sears, Roebuck & Co. – Sears manufactured heater which caused extensive injuries to infant P; RULE: trial court may review jury’s damages to determine whether they exceed the maximum amount a jury could reasonably award] b. What is Excessive? i. Damages will be deemed excessive if it falls outside the range of fair and reasonable compensation or results from passion or prejudice, or if it is so large that it shocks the judicial conscience. 1. [Richardson v. Chapman – two girls injured when truck driver rear-ended their car. Court slightly reduces damages but does not find jury to have been prejudiced. Damages didn’t shock judicial conscience.] B. Collateral Source Rule: common law, P is entitled to recover her out-of-pocket expenses, even if P was reimbursed for these losses by some third party. (e.g. insurance company) a. [Montgomery Ward & Co., Inc. v. Anderson – P badly injured in fall while shopping at Montgomery Ward; RULE: discounted medical services are a collateral source not to be considered in assessing damages] b. [X: Anheuser-Busch, Inc., v. Starley -P's truck gets hit by D. P sues even though it is fully compensated from insurer. RULE: Collateral Source Rule: P is not precluded from suing wrongdoer even if he has been compensated by independent source.] c. Rationale: despite the fact that double recovery occurs, the claimant should benefit from the Collateral Source Rule, not the tortfeasor. Tortfeasor should internalize the whole cost. d. Modifications: NOTE: over half the states have modified the collateral-source rule by statute. Half of these say the information on the collateral source is admissible evidence w/o indicating to Torts II: Outline Philip Larson Page 7 the jury what they are to do w/the information. Others specify the award is to be reduced by the amount of collateral source. C. Mitigation: P has a “duty to mitigate” meaning P cannot recover for any harm which, by reasonable care, he could have avoided. P cannot recover for harm which would have been avoided if P had sought adequate medical care. a. [Zimmerland v. Ausland – P suffered knee injury as result of D’s negligence in driving car. Expert testifies that injury would not have been permanent if P had gotten surgery. RULE: there is a duty to mitigate damages in tort law. An injured person cannot recover damages for injury that could have been lessoned by a reasonable treatment.] b. Factors involved: factors which determine whether P was reasonable in failing to mitigate include i. 1) risk involved in treatment [Zimmerland v. Ausland] ii. 2) probability of success [Zimmerland v. Ausland] iii. 3) money or effort required [Zimmerland v. Ausland] 1.2.3 PUNITIVE DAMAGES A. Generally: punitive damages can be awarded to penalize D for particularly outrageous conduct. (common in products liability cases). Purpose is to deter future action and punish D. a. Negligence Cases: in cases of negligence, punitive damages are usually awarded only where D’s conduct was “reckless” or “willful and wanton”. i. Reckless Disregard: To find reckless disregard, courts look to the cost of reducing the risk, D’s awareness of the danger, reasons for failing to discover the danger, and other factors. 1. [Gryc v. Dayton-Hudson Corp. – P (child) sued D (fabric manufacturer) when fabric of pajamas caught fire. RULE: punitive damages upheld when caused by reckless acts in disregard of P’s safety.] a. reduction of danger was economically feasible and D created a “substantial danger” b. Constitutional Limits: The US Constitution places some limits (not severe) on award of punitive damages. i. Due Process: D might be able to show that punitive damages violated its 14th Amendment due process rights. If they are 1) grossly excessive or 2) arrived at in a way that gives undue discretion to the jury. 1. [NOT REQUIRED: BMW v. Gore – RULE: Punitive damages award that is 500 times the amount of the actual harm suffered is grossly excessive and is unconstitutional] c. Insurance: parties can purchase insurance that covers punitive damages. Public policy favoring insurance trumps the need to punish wrongdoer. Even with insurance, wrongdoer suffers indirect punishment (e.g. higher rates, loss of license,etc.) i. [NOT REQUIRED: Price v. Hartford Accident and Indemnity Co. -] 1.3 WRONGFUL DEATH AND SURVIVAL 1.3.1 WRONGFUL DEATH & SURVIVOR A. Wrongful death distinguished from survivor: Most states have two types of statutes taking effect when personal injury victim dies. Survival statute governs whether victim’s own right of recovery continues after death. Wrongful death statute governs the right of victim’s survivors (e.g. spouse & children) to recover. a. [Moragne v. State Marine Lines, Inc. – P (widow) sues D (vessel owner) for husband’s death. RULE: US SUP. CT. maritime law should allow cause of action for wrongful death.] Torts II: Outline Philip Larson Page 8 B. Survival Statutes: Survival statute in most states says that when an accident victim dies, his estate may sue for those elements of damages that the victim himself could have sued for had he lived. Thus, these typically allow suing for pain and suffering, lost earnings prior to death, actual medical expenses, etc. a. Common law: all rights and tort liabilities terminated upon death. Thus, if victim or tortfeasor died prior to suit, no cause of action could be brought. Because of this harsh result, states have enacted survival statutes. i. [X: Osterland v. Hill – P rents canoe to drunk who drowns. RULE: right of action for tort does not survive the death either of the person injured or the wrongdoer] b. Instantaneous Death: in many states, if death is instantaneous, there is no survival action because all damages are sustained after death. C. Wrongful Death: Most states have “wrongful death” statutes allowing a defined group of people to recover for loss they have sustained by virtue of decedent’s death. Typically spouse or children can recover. If no spouse or childen, often parents can recover. Stepchildren usually are not considered beneficiaries. i. [Moragne v. State Marine Lines, Inc. – P (widow) sues D (vessel owner) for husband’s death. RULE: US SUP. CT. maritime law should allow cause of action for wrongful death.] b. Loss of companionship: measure of damages for wrongful death of a minor child includes the loss of companionship the family suffers. i. [Selders v. Armentrout – P (parents) sue D (tortfeasor) for wrongful death of 3 minor children; RULE: loss of companionship should be part of damage calculation] c. Interval b/w injury and death: damages can include loss of property, loss of wages, and pain and suffering experienced by decedent during interval b/w injury and death. i. [Murphy v. Martin Oil Co. – P (spouse) sues D (negligent fire on property) for negligently killing husband; RULE: spouse can maintain action for loss of property, wages and pain & suffering b/w injury and death] d. Causes of Action that survive: Injury to tangible property survive decedent’s death. Usually personal injury actions survive. Normally intangible rights such as defamation and IIED do not survive. 1.4 DEFENSES IN NEGLIGENCE 1.4.1 CONTRIBUTORY NEGLIGENCE A. General: At common law, doctrine of contributory negligence applies. Doctrine says that if P is negligent and contributes proximately to his injuries, he is totally barred from recovery. a. [X: Haeg v. Sprague, Warner & Co. -P hits D w/car but D found contributorily negligent. RULE: reliance on D was contributory negligence and, therefore, a complete bar. Court would have preferred legislation to allow comparative negligence.] b. Rationale: 1. punish P for negligence; don’t let someone w/“unclean hands” recover; 2) economic reason – want to create incentives for both P and D to take precaution. B. Standard of Care: P is held to the same standard of care as D. a. [Butterfield v. Forrester – P (on horse) trips over obstruction put in road by D. Evidence was that P could have seen it but was riding too fast. RULE: under contributory negligence doctrine, P who fails to exercise reasonable care to avoid an injury is completely barred from recovery.] C. Proximate cause: Contributory negligence defense only applies where P’s negligence proximately causes his injuries. The same test for “proximate causation” is used where D’s liability is being evaluated. D. Claims against which defense is not usable: since contributory negligence defense is based on general negligence principles, it may be used as a bar only to a claim that is itself based in negligence. Torts II: Outline Philip Larson Page 9 a. Intentional Torts: defense cannot be used where P’s claim is for an intentional tort. b. “Willful and wanton” or “Reckless”: If P’s conduct was “willful and wanton” or “reckless”, contributory negligence defense will not be allowed. c. Negligence per se: contributory negligence can usually be asserted as a defense even to D’s “negligence per se” unless the statute was enacted solely for the purpose of protecting a class of which P is a member, in which case it usually cannot be asserted. E. “Last Clear Chance” doctrine: “last clear chance” acts as a limit on contributory negligence. If D had the last opportunity to prevent the harm, and P did not have the opportunity, D may be liable b/c this wipes out the effect of P’s contributory negligence. a. Rationale: 1) Proximate Cause – hard to say P was the cause of the accident; 2) greater fault w/D; 3) judges want to avoid applying harsh contrib.. neglig. rule. b. [X: Perin v. Nelson & Sloan -P sues D (cement truck) for driving over his foot. RULE: Last Clear Chance. D had last clear chance to avoid accident so P’s contributory negligence doesn’t prevent recovery.] – P was negligent but could not escape by ordinary care. D knows that P can’t escape. By exercising ordinary care, D could have avoided the accident. c. [Davies v. Mann – P (mule owner) sues D (wagon rider) for running over his mule w/wagon; RULE: D had last clear chance to avoid the accident and therefore cannot use contributory negligence as a defense] d. [E.g. P crosses street w/o looking. D, traveling faster than speed limit, sees P but negligently hits the accelerator while trying to hit the brake. P never spotted D. D’s “last clear chance” wipes out D’s claim of contributory negligence on part of P.] e. Inattendant D: If b/c of D’s inattentiveness he fails to discover P’s plight and therefore never deals with it, most courts still apply last clear chance saying that D is still screwed. 1.4.2 COMPARATIVE NEGLIGENCE A. General: A “comparative negligence” system rejects all-or-nothing approach of contributory negligence. Instead, it attempts to divide liability between P and D in proportion to their relative degrees of fault. P is not barred from recovery for contributory negligence, but his recovery is reduced by a proportion equal to the ratio of his own negligence to total negligence. a. Commonly adopted: 46 states have adopted some form of comparative negligence. i. [X: Scott v. Alpha Beta Co. -P (bad knee & wearing slippers) sues D after falling on slippery floor. RULE: D found 60% liable, P 40% liable. D should have mopped up the water and P shouldn’t have been wearing slippers with a bad knee.] ii. [X: Golden v. McCurry – P (pedestrian) hit by car sues D (driver). RULE: Keeping Contrib. Neglig. -Sup. Ct of AL had power to change contrib. neg. but chose to leave it to legislature. 1980] iii. [X: Galena & C.U.R. Co. v. Jacobs -RULE: Moving to Comparative Neglig. -Sup. Ct. IL says that "degrees of negligence must be measured and considered." When P's negligence is comparatively slight, he can recover.] b. [McIntyre v. Balentine – P (intoxicated truck driver) sues D (negligent tractor driver); RULE: court adopts modified comparative fault rule. P’s damages are reduced by percentage of his negligence only if P’s negligence does not exceed 49%] B. Pure vs. 50% Systems: Only 13 states have adopted “pure” comparative negligence. The rest completely bar P if his negligence is “as great” as D’s or “greater” than D’s. a. [McIntyre v. Balentine – RULES: got rid of last clear chance doctrine and joint and several liability. With multiple D’s, P can recover if his percentage is less than the combined negligence of all tortfeasors.] C. Multiple parties: where there are multiple D’s, comparative negligence is harder to apply. a. Some jurisdictions: compare P’s fault to each D. P can only recover where his fault is less. b. Other jurisdictions: compare Ps fault to all D’s combined. If less, P can recover. Torts II: Outline Philip Larson Page 10 c. All parties before the Ct.: this is simple. If P is 20% at fault, D1 is 50% and D2 is 30%, P will collect 80% of his damages. i. [McIntyre v. Balentine – RULE: With multiple D’s, P can recover if his percentage is less than the combined negligence of all tortfeasors.] d. Not all parties before the Ct. : If not all D’s are before the ct., difficult questions of joint-andsevvera liability arise. Issue is whether D’s before court should pay for whole loss aside from that caused by P’s own fault. Under traditional “joint and several liability” P could collect the full loss (minus his own fault). D. Last Clear Chance: courts are split about whether doctrine applies in comparative negligence jurisdictions. E. Intentional Torts: most comparative negligence statutes DO NOT apply. (only in negligence cases) F. Seat belt defense: The seat belt defense is increasingly accepted in comparative negligence jurisdictions. D argues that P’s injuries could have been reduced or avoided had P worn a seat belt. P’s damages are reduced. a. Contributory negligence jurisdictions: In most of these jurisdictions, courts refuse to allow the seat belt defense. P’s failure to wear a seat belt does not count against his recovery. b. Comparative negligence jurisdictions: In these states, seat belt defense has been more successful. Different flavors: 1) D is only liable for injuries that would have occurred even had P worn a seat belt; 2) D is liable for all injuries, with a reduction made equal to percentage of Ps fault; 3) D is liable for all injuries, but Ps fault reduces his recovery for those injuries that would have been avoided. i. Effect of statute: 32 states have mandatory seat belt use statutes. However, the majority prohibit the seat belt defense completely or make it almost valueless by only reducing damages slightly. 1.4.3 ASSUMPTION OF RISK A. General: P assumes the risk of certain harm if she has voluntarily consented to take her chances that harm will occur. Where such an assumption is shown, common law says P is completely barred from recovery. B. Express Assumption of Risk: If P explicitly agrees with D, in advance of any harm, that P will not hold D liable, P has “expressly” assumed the risk of that harm. Does not typically work in products liability cases. a. Public policy against assumption: Even P’s express assumption of the risk will not bar P from recovery if there is a public policy against the assumption of risk involved. [Winterstein v. Wilcom – RULE: parties may assume the risk of negligence in a written agreement, provided that agreement does not violate public policy.] i. Bargaining power – if D’s position as a unique provider of a certain service gives him greater bargaining power than P, and D uses this power to force P into a waiver, court is likely to find that public policy prohibits use of the assumption of risk doctrine. [Winterstein v. Wilcom – P (drag racer) sued D (racetrack owner) when he hit a cylinder on the track; RULE: bargaining process must be free and open for express assumption of risk to apply; agreement was valid because process was 1) freely bargained for; 2) did not involve public interest; 3) did not involve waiver of a safety statute] ii. Intentional or willful misconduct – public policy usually prohibits a waiver of liability for D’s willful and wanton or “gross” negligence, and for D’s intentionally tortious conduct. iii. Health care: Ct’s almost never allow P to expressly assume the risk of harm with respect to medical services. C. Implied Assumption of Risk: Even if P never makes an actual agreement with D whereby P assumes the risk, P may be held to have assumed certain risks by her conduct. Here, the assumption of risk is implied. Torts II: Outline Philip Larson Page 11 a. Two requirements: For D to establish implied assumption, he must show that Ps actions demonstrated that she 1) knew of the risk in question; and 2) voluntarily consented to bear that risk herself. b. Subsumed by doctrine of comparative negligence: i. [Blackburn v. Dorta – RULE: doctrine of comparative negligence, adopted in most states, subsumes the doctrine of implied assumption of risk.] c. Primary v. Secondary Assumption of Risk: primary assumption of risk is simply another way of saying that D was not negligent b/c he never owed a duty to P; in secondary assumption of risk, D would ordinarily have a duty to P but P’s assumption of risk causes the duty to dissipate i. [e.g. P, injured, asks for a ride to hospital in D’s car, which P knows has bad brakes.] ii. [Blackburn v. Dorta – talks about how comparative negligence subsumes implied assumption of risk] d. EXCEPTIONS: i. Duress: For instance, there is no assumption of risk if D’s conduct left P with no reasonable choice but to encounter a known danger. 1. [Rush v. Commercial Realty Co. – P (tenant) fell through trapdoor in a bathroom that she was aware of and sued D (landlord). RULE: a person does not voluntarily accept a risk when no reasonable alternatives exist; court said she had no choice but to encounter the risk] ii. Choice not created by D: where it is not D’s fault that P has no reasonable choice but to expose herself to the risk, the defense will apply. D. Knowledge of Risk: The requirement that P be shown to have known about the risk is strictly construed. For instance, the risk must be one which was actually known to P, not merely one which ought to have been known. E. Distinguished from contributory negligence: P’s assumption of risk will often also constitute contributory negligence. a. Defense to reckless conduct: Distinguishing b/w contrib. negl. and assumption of risk may be important when D’s conduct was reckless. Contrib. negl. is not a defense to reckless conduct, but assumption of risk typically is. b. Reasonable assumption of risk: however, this is not always true. Sometimes conduct which constitutes assumption of risk is not contributory negligence (e.g. P, injured, asks for a ride to hospital in D’s car, which P knows has bad brakes. This is an assumption of risk, even though P has behaved perfectly reasonably in view of the lack of alternatives.) c. Regarding comparative negligence: In many comparative fault states, assumption of risk is no longer a defense. Most states don’t allow implied assumption of risk to be a bar to recovery in comparative fault. It just goes into the calculation of fault. Note: express assumption of risk is usually still a defense. 1.4.4 STATUTE OF LIMITATIONS A. Discovery of Injury: If P does not discover his injury until long after D’s negligent act occurred, the statute of limitations may not start to run until P discovered (or ought to have discovered) the injury. a. Medical malpractice: frequently apply the “time of discovery” rule for SOL accrual. i. [Teeters v. Currey – P (woman patient) sues D (doctor) for negligently performing tubal ligation when she discovers she is pregnant two years later; RULE: Discovery Rule: a cause of action for medical malpractice does not accrue until the injured party discovers or should have discovered the injury.] b. Majority: have adopted discovery rule Torts II: Outline Philip Larson Page 12 B. Tolling: tolling may also stop the running of time if P is a minor or incompetent or D fraudulently conceals the presence of a cause of action. 1.4.5 IMMUNITIES A. Family Immunity: Common law recognizes two immunities in families: between spouses and b/w parent/child. a. Husband and Wife: at common law, inter-spousal immunity prevented suits by one spouse against the other for personal injury. They were considered one single entity. i. Rationale: 1) allowing husbands and wives to sue each other in tort would disrupt the harmony in the home. 2) An injured spouse has adequate remedies in criminal law and divorce. 3) Might lead to frivolous lawsuits. 4) Potential for collusion and fraud where insurance is involved. ii. Abolition of rule: over half the states have completely abolished this immunity. 1. [Freehe v. Freehe – husband sues wife for injuries caused by negligently maintained tractor. RULE: spouses are no longer immune from liability to each other for personal injury cases.] b. Parent/Child: at common law, there is immunity that bars suit by child against his parents or vice versa. Many states have abolished this as well. i. [Renko v. McLean – 18 yr old P (daughter) sues D (mother) for injuries sustained in car accident when she was 17; RULE: children may not sue their parents for torts. This doctrine is applicable even if the child is injured during minority but does not bring suit until after she reaches majority.] 1. Rationale: same as for husband/wife. Also, might make parent unwilling to drive kids around. 3rd party could claim contrib. against parent for negligent supervision. B. Charitable Immunity: Charitable organizations, as well as educational and religious ones, receive immunity at common law. a. Abolished: more than 30 states have abolished charitable immunity and others have cut back on it. (in particular where there is liability insurance). i. [Abernathy v. Sisters of St. Mary’s – P (patient at hospital) sues D (charitable hospital) for negligently failing to assist him as he moved from bedroom to bathroom. RULE: nongoov’ charitable institutions are liable for their own negligence and the negligence of their employees.] ii. NOTE: this case shows how difficult it is to balance public policy issues. Strongest argument in support of getting rid of charitable immunity is that they can purchase liability insurance. 1.5 PRODUCTS LIABILITY (PL) 1.5.1 INTRODUCTION A. Three theories: Products liability is when a seller is liable for injuries that a defect causes to its purchaser, user, or sometimes bystanders. Usually the injury is personal injury. The liability can be based on any of the following theories: a. Negligence b. Warranty c. “Strict tort liability” 1.5.2 NEGLIGENCE A. Negligence & privity: ordinary negligence principles apply to a case in which personal injury is caused by a carelessly manufactured product. Torts II: Outline Philip Larson Page 13 a. Privity: historically, use of negligence in PL was limited by privity requirement. This required that P contracted directly with D. Every state now rejects the privity requirement. b. Remote Purchasers: one who negligently manufactures a product is liable for any personal injuries proximately caused by his negligence. i. [MacPherson v. Buick Motor Co. – D, Buick, neglected to inspect and perform safety tests on car. Wheel made of wood crumbled and P injured. RULE: US SUP. CT. widened liability standard. A manufacturer of any product owes a duty of care to remote purchasers if the product is likely to cause injury if negligently made.] ii. Bystander: Even where P is a bystander, P can recover in negligence if he can show that he was a “foreseeable P”. [e.g. pedestrian hit by car w/defective breaks sues manufacturer] B. Classes of Defendants a. Manufacturers: manufacturer is most likely in the distribution chain to have been negligent because he 1) carelessly designed the product; 2) carelessly manufactured the product; 3) carelessly performed reasonable inspections and tests of finished products; 4) failed to package or ship it in a reasonably safe way; 5) did not take reasonable care to obtain quality components from a reliable source. b. Retailers: A retailer who sells a defective product may be, but usually is not, liable in negligence. Just because D sold a negligently manufactured or designed product is no by itself enough to show that she failed to use due care. Retailer typically has no duty to inspect the goods. Thus, suit against the retailer is now normally brought on a warranty or strict liability theory, not negligence. 1.5.3 WARRANTY A. General: A buyer of goods which are not as they are contracted to be may bring an action for breach of warranty. The law of warranty is mainly embodied in the UCC. B. Express Warranties: A seller may expressly represent that her goods have certain qualities. If the goods turn out not to have these qualities, the purchaser may sue for this breach of warranty. a. Common Law: Caveat Emptor -traditionally, actions for breach of express warranties required privity. Caveat Emptor (buyer beware) applied safeguarding manufacturers from liability. b. UCC: UCC§2-313 gives a few ways that an express warranty can arise: 1) a statement of fact or promise about the goods; 2) a description of the goods; and 3) the use of a sample or model. i. [Baxter v. Ford Motor Co. – D (car dealer) promises car has “shatterproof glass”. While driving, P’s windshield shatters and damages P’s eyes. P can sue for breach of express warranty that glass would be shatterproof] ii. Privity: There is usually no requirement of privity for breach of express warranty. [Baxter v. Ford Motor Co – caveat emptor does not apply particularly when manufacturer makes false representations] c. Strict Liability: breach of express warranty acts kind of like strict liability – as long as P can show a statement of fact was false it doesn’t matter if D believed it to be true or even if D could not possibly have known that it was untrue. C. Implied Warranties: existence of a warranty as to the quality of goods can also be implied from the fact that the seller has offered the goods for sale. a. Warranty of Merchantability: UCC imposes several implied warranties as a matter of law. UCC§2-314 “a warranty that goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.” i. Meaning of “merchantable”: To be merchantable, goods must be “fit for the ordinary purposes for which such goods are used. Torts II: Outline Philip Larson Page 14 ii. Seller must be a merchant: Seller must be in the business of selling the kind of goods in question. b. Fitness for Particular Purposes: another implied warranty is that they are “fit for a particular purpose” where 1) seller knows that buyer wants the goods for a particular purpose; and 2) the buyer relies on the seller’s judgment to recommend a suitable product c. Privity: states have almost all rejected any privity requirement for implied warranties. D. Disclaimers – Defense to Warranties: seller can make a written disclaimer of both implied and express warranties by making it “conspicuous” and mentioning the word “merchantability” itself. (e.g. “as is” is an implied disclaimer.) a. Exception: Contracts of Adhesion – Contracts of adhesion are contracts between parties of unequal bargaining power where the buyer must “take it or leave it” i. RULE: Implied warranties of merchantability cannot be disclaimed by express contractual terms that are a part of a K of adhesion. 1. [Henningsen v. Bloomfield Motors – P bought car from D for his wife. Fine print disclaimed all implied warranties. RULE: “fine print disclaimer of implied warranties is a contract of adhesion and doesn’t trump implied warranty”] E. Why warranties over strict liability? 1) Pure Economic Harm – P usually does better under warranty theory than strict liability; 2) Statute of Limitations – usually shorter for strict liability so sometimes warranty is all that is left. 1.5.4 STRICT LIABILITY A. General: almost all states apply doctrine of “strict product liability”. Seller of product is liable without fault for personal injuries caused by product if it was sold in a defective condition. This is true even if seller used all possible care and even though P did not buy product from of have K w/seller. a. [X: Escola v. Coca Cola -P's coke bottle exploded. RULE: a manufacturer incurs an absolute liability for products they put in the market knowing they will be used without inspection.] b. [X: Shepard v. Superior Court -defect in door lock caused P to be thrown from car and killed. Family sues for emotional distress. RULE: Strict product liability applies to emotional distress as well as physical injury.] Rationale – manufacturer is cheapest cost avoider. c. [Greenman v. Yuba Power Products, Inc. – P (woodworker) sues D (manufacturer) for injuries caused by defective lathe; RULE: court adopts strict liability approach. Regardless of whether any express or implied warranties were made, manufacturers is liable when: i. 1) defective product; ii. 2) used as intended; iii. 3) caused injuries; iv. 4) manufacturer knew product would be used w/o inspection by user.] d. Non-manufacturer: strict product liability applies also to retailers, that are in the business of selling such products. e. Categories of Defects i. Manufacturing Defects: a particular instance of a product is more dangerous than others because the product deviated from the intended design. ii. Design Defects: all similar products manufactured by D are the same and they all bear a feature whose design is itself defective or unreasonably dangerous. Exists only when “the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design” iii. Failure to Warn Defects: In failure-to-warn case, maker neglects to give a warning of a danger in the product, and this lack of warning makes an otherwise safe product unsafe. Torts II: Outline Philip Larson Page 15 f. Meaning of “Defective”: departs from its original design even though all possible care was exercised. B. Unknowable Dangers: if danger of product’s design was “unknowable” at time of manufacture, there will be no liability. There was no “foreseeable risk” and thus no design-defect liability. a. Failure to Warn: Similarly, there is no “failure to warn” liability for a danger whose existence was unknowable at the time of manufacture. Strict liability for failure to warn is therefore limited. C. Obvious Dangers: a danger in a product being “obvious” can impact liability. a. Manufacturing defect: defect being obvious probably will not block liability. Obviousness of problem does not stop the product from being defective. (e.g. can of tuna has a sliver of metal in it.) b. Design Defect: this would be a factor of liability but doesn’t automatically mean that P cannot recover. Question is whether the design’s benefits outweigh its dangers, considering possible alternative designs. Therefore, negligence/fault analysis creeps in to determine whether strict liability applies. c. Failure-to-warn: if defect is obvious, this will normally prevent failure-to-warn liability because adding a warning won’t add anything b/c P will be unlikely to notice it as well. D. Proving the case (elements) [Greenman v. Yuba Power Products –RULE: court adopts strict liability approach. Regardless of any express or implied warranties were made, manufacturers is liable when 1)defective product; 2) used as intended; 3) caused injuries; 4) manufacturer knew product would be used w/o inspection by user.] a. Product was manufactured by D b. Product was defective c. Defective aspects of product were cause in fact and proximate cause of injuries d. Defect existed at time product left D’s hands. i. [Rix v. General Motors Corp. – RULE: product must be defective at the time it was sold] 1.5.5 DESIGN DEFECTS A. Three theories: Products liability is when a seller is liable for injuries that a defect causes to its purchaser, user, or sometimes bystanders. Usually the injury is personal injury. The liability can be based on any of the following theories: B. Negligence dominates: As the 3rd Restatement puts it, a product has a defective design “when the foreseeable risks of harm posed by the product could have been reduced or avoided by the adoption of a reasonable alternative design…” a. Court will consider: cost and utility of the alternative compared w/cost and utility of D’s design C. Risk Utility Analysis: instead of the “reasonable alternative design” courts have started using a “negligence-based risk-utility analysis” focusing on actions of the manufacture rather than just on the product being “defective”. a. [Prentis v. Yale Mfg. Co – P (forklift operator) sues manufacturer for design defect of failing to install a seat; RULE: design defects judged under negligence, weighing risks of injury against costs of safer designs; Reason: strict liability has proved problematic; allows juries to focus on manufacturer’s conduct, not just defining “defective”] b. P bears burden: P bears burden of proving a design defect based on risk-utility analysis. [O’Brien v. Muskin Corp. – P (diver) dove off roof into shallow pool and sued for slippery bottom (design defect) and failure to warn of the danger; RULE: P bears burden of proving the design defect based on risk-utility analysis] c. Relevant Factors: i. Usefulness of the product Torts II: Outline Philip Larson Page 16 ii. Likelihood product will cause injury iii. Availability of safer substitute iv. Manufacturers ability to eliminate risk v. Users ability to avoid danger by use of reasonable care vi. User’s anticipated awareness of the danger vii. Feasibility of manufacturer to spread the loss by price setting or insurance. [O’Brien v. Muskin Corp. – see above] D. Types of Claims: there are two common types of design-time claims a. Structural defects: P shows that b/c of D’s choice of materials, the product had a structural weakness, which caused it to break or otherwise become dangerous. b. Lack of safety features: P shows that a safety feature could have been installed on the product with so little expense (compared to cost of product and magnitude of danger) that it is defective design not to install the feature. i. State of the Art: D can rebut “lack of safety features” by showing that competitive products similarly lack the safety feature to show it is “state of the art”. Alternatively, they may try to prove that “the best scientific technology that was economically feasible” was used… 1. [O’Brien v. Muskin Corp. – “state of the art” evidence may help D] E. Suitability for intended purpose: D not usually liable for injuries stemming from unforeseeable, unintended misuses of the product. a. Unforeseeable Misuse: if misuse is not reasonably foreseeable, D does not have a duty to guard against the misuse. b. Foreseeable Misuse: if misuse is reasonably foreseeable, D must guard against the danger or muse sometimes warn the purchaser against the misuse. i. [Ford Motor Co. v. Matthews – P (tractor operator) killed when defective safety switch allowed tractor to be started in gear; RULE: manufacturer is liable for reasonably foreseeable injuries caused by abnormal uses of its products.] ii. MAJORITY: foreseeable misuse does not prevent liability. Tractors are meant to be started so this was foreseeable. 1.5.6 DUTY TO WARN A. Duty to warn: an extra obligation on the manufacturer: B. Regarding the Three theories: a. Duty to Warn & Manufacturing defects: if a product is defectively manufactured, no warning can save D from strict liability. b. Duty to Warn & Design Defects: if a product is defectively designed, a warning will generally not shield D from strict product liability. c. Properly manufactured and designed product: even if properly manufactured and propertly designed, D must warn if there is a non-obvious risk of personal injury from using the product. C. Risk-Utility Basis: Under 3rd Restatement, a product will be deemed defective on account of “inadequate instructions or warnings”…”when the foreseeable risks of harm imposed on the product could have been reduced or avoided by the provision of reasonable instructions or warnings…and the omission of the instructions or warnings renders the product not reasonably safe. a. State of the art: [Anderson v. Owens-Corning Fiberglass Corp. – P (electrician) sued insulation manufacturer for failure to warn of risks of asbestos exposure; RULE: State of the art evidence is relevant to an action based on “Failure to Warn”] D. Unknown and unknowable danagers: If D can show that he 1) didn’t know and 2) should not have known, of the danger at the time of the sale, most courts hold there is no duty to warn of the danger. Torts II: Outline Philip Larson Page 17 a. Insurance: [Anderson v. Owens-Corning Fiberglass Corp. – RULE: a manufacturer is not the absolute insurer of its products] b. Still a high standard: manufacturers still have to analyze all known scientific data and warn if any of the data shows risks from their products. E. “Open & Obvious” Danger: If the danger is obvious to most people, this will be a factor in reducing D’s obligation to warn. 1.5.7 WHO MAY BE A DEFENDANT A. Chattels: In cases involving “good” or “chattel”, both strict and warranty liability will apply to any seller in the business of selling goods of that kind. a. Retailers: this means that a retailer who sells but did not manufacture the good will have strict liability and warranty liability, even if she could have done nothing to discover the defect. i. Indemnity: if retailer is held liable in this way, she will be entitled to indemnity from the manufacturer or wholesaler as long as the retailer was not negligent. b. Used Goods: courts are split on whether there is strict or warranty liability for seller of used goods. MAJORITY hold there is no such liability. i. [Peterson v. Lou Bachrodt Chevrolet Co. -D sells used car to X. Brakes are defective and X hits P, a pedestrian. P cannot recover against D; RULE: remote retailer, outside original producing marketing chain, is not subject to strict products liability] 1. “we decline to make used car dealers the insurer against defects which had come into existence after the chain of distribution was completed” Rationale: making them liable would make them insurers of the product even though the problems arose when the car was in possession of the buyer. B. Services: someone selling services, rather than goods, generally does not have strict liability nor UCC implied warranties. a. Product incorporated into service: product in combination with service usually will apply strict liability. i. [P goes to D’s beauty parlor. D uses solution that burns P’s scalp. D is liable] ii. EXCEPTION: Services by professionals: where services are rendered by a health professional, she is almost never liable in strict or warranty theory 1. [Hector v. Cedars-Sinai Medical Ctr. -D, surgeon, puts defective pacemaker into P’s heart. D not liable for strict liability for product defect.; RULE: providers of medical services are not subject to strict products liability] 2. NOTE: negligence claims are still available 1.5.8 DEFENSES ON P’s CONDUCT A. General Negligence Rule Applies: depending on jurisdiction, comparative or contributory negligence. a. [Daly v. General Motors Corp – P, drunk driver not wearing a seatbelt, killed when allegedly defective door latch gave way; RULE: comparative negligence extended to strict products liability, reducing Ps recovery to extent their own conduct contributed to the injury.] B. Types of negligence by P: a. Failure to discover the risk: P might “negligently” fail to discover the defect. However, normally a P can assume the product is defect free so this won’t reduce her recovery. b. Knowing assumption of risk: P, fully aware of product’s defect, voluntarily and unreasonably decides to “assume the risk”. Modern trend treats this as a form of comparative negligence. c. Ignoring safety precautions: P consciously fails to use an available safety device, and is injured by a product defect that would not have happened had the safety device been used. In most courts, this reduces but does not eliminate P’s recovery. 1.5.9 EXPERT TESTIMONY A. RELEVANCE TEST: most of the 20th century the relevance test dominated except in lie detector tests, voice spectography and other physical techniques. Torts II: Outline Philip Larson Page 18 a. Criticism: led to a large amount of junk science. B. RELIABILITY TEST: became prevalent in the 80s, particularly in toxic tort situations. This was said to solve the junk science problem. a. Federal court: said general acceptance was not viable and that relevance test would not work because of too much junk science. Therefore, the reliability test is the right test in federal court. b. Factors to consider in determining reliability: i. 1) Peer view ii. 2) Falsifiability (Testing) iii. 3) Known or potential rate of error iv. 4) General acceptance c. [Daubert v. Merrell Dow Pharmaceuticals – i. Two part test: 1. 1) Scientific Knowledge: Expert testimony must be scientific knowledge (e.g. was the work product of the expert derived by the scientific method and does it amount to good science?) a. Was there pre-litigation research? Evidence of good testimony… b. Did they follow the scientific method. 2. 2) Relevancy: must be relevant to the point at hand. Must show general causation and specific causation. a. General Causation: substance could cause a particular injury. b. Specific Causation: substance did, in this case, cause a particular injury. ii. Issue w/Daubert: left open the issue of what to do with non-scientific expert evidence. If there is a distinction, how do you draw it? d. [Kumho Tire Co v. Carmichael – Ps brought PL action against tire manufacturer. Tire expert was not using a scientific method. i. Non Scientific Expert Testimony: Kumho argues that we should follow Daubert’s reliability test for all expert testimony, even if it is non-scientific. ii. Added more factors to consider including: 1. 1) whether experts conducted independent research prior to litigation. 2. 2) whether expert unjustifiably extrapolated to an invalid conclusion 3. 3) whether it has accounted for obvious alternative explanations. 4. 4) whether field of expertise is known to lead to reliable results (e.g. astrology, necromancy) e. EFFECT: if you have a products liability case, you want to keep it out of federal court because Daubert and Kumho have made requirements of expert testimony pretty strict. Many state courts have adopted Daubert, but some of them adopted them prior to Kumho tire, thinking it would be more liberal. Many states (CA, FL, etc.) have retained the Frye test. C. GENERAL ACCEPTANCE TEST (Frye) a. Federal Law: under federal law, the general acceptance test is not viable. b. States: many state courts use the Frye test for general acceptance c. [Kuhn v. Sandoz Pharmaceuticals – woman just gave birth and was lactating. Pill she took reduced her blood pressure and she died. P wants to say she died b/c she took the pill. Court said Frye did not apply because of the pure opinion exception.] i. Frye test: acts as a qualification to statutory standard for admission of expert testimony and is applied in circumstances where a new or experimental scientific technique is employed by an expert witness. 1. Frye Requires: before expert scientific opinion can be used as evidence, basis of opinion must be shown to be generally accepted as reliable within the expert’s particular field. Torts II: Outline Philip Larson Page 19 ii. Exception to Frye Test: Frye test does not apply to “pure opinion”, or expert opinion developed from inductive reasoning based on expert’s experience or observation. 1.6 NUISANCE 1.6.1 NUISANCE GENERALLY A. Type of Injury: “Nuisance” refers to a type of injury not a type of tort. In “public nuisance”, the injury is the loss of any right P has by virtue of being a “member of the public”. In “private nuisances”, P’s injury is the interference with his use or enjoyment of his land and must be different than that occurring in the public in general. B. Three mental states: D can be in one of three mental states: a. 1. Intentional Interference: intentional interference w/P’s rights i. [Morgan v. High Penn Oil Co. – P (landowner) sued D (oil refining co.) for nuisance of noxious fumes entering his lands; RULE: intentional invasions of people’s use and enjoyment of land can be actionable, even when the conduct is not negligent] b. 2. Negligence c. 3. Abnormally dangerous activity or other conduct giving rise to strict liability. 1.6.2 PUBLIC NUISANCE A. Definition: “an interference with a right common to the general public.” a. Examples: health hazards, improper businesses (e.g. unlicensed bar), obstruction of public streets b. Factors: # of factors considered when deciding if it is a public nuisance including type of neighborhood (e.g. farm town?), social value of activity, frequency/degree of nuisance i. Substantial harm required: public nuisance will not be found unless harm is substantial ii. Must injure public at large: P must show there has been actual injury to public at large c. Need not be a crime: nuisance does not require conduct to be a crime. B. Requirement of Particular Damage: private citizen may recover for his damages from a public nuisance only if he sustained damage that is different in kind and degree from that suffered by public generally. a. [Philadelphia Electric Co. v. Hercules, Inc. – PECO (P) forced to remedy toxic waste seeping from its property. PECO sued D who sold the property to him saying that seller caused the situation; RULE: actions for private nuisance can typically only be brought by neighboring landowners; actions for public nuisance can be brought only be members of public whose general rights have been interfered with] b. Magnitude of monetary loss irrelevant: In determining whether P’s damage is different in kind, the magnitude of financial harm is usually irrelevant. c. Injunction: requirement of a “different kind” of harm will not necessarily be imposed in suits of injunction as opposed to one for damages. (injunction will help everyone but prevent windfall of litigation) C. Who sues for Public Nuisance? Generally only the district attorney or other state official. Therefore, public nuisance is like a low-grade criminal offense. 1.6.3 PRIVATE NUISANCE A. Definition: “unreasonable interference with P’s use and enjoyment of his land”. Only about land. Unless your land is affected, you can’t sue. a. Must have interest in land: P can sue on private nuisance only if he has an interest in the land being affected (e.g. fisherman injured by oil spill cannot sue for private nuisance because no interest in land held by him is affected) b. Elements: 1) that his use and enjoyment of his land was interfered w/in a substantial way; and 2) D’s conduct was either negligent, abnormally dangerous, or intentional. Torts II: Outline Philip Larson Page 20 B. Interference with use: interference must be substantial. No recovery for small inconveniences. C. D’s Conduct: no general rule of “strict liability” in nuisance. P must show D’s conduct was negligent, intentional or abnormally dangerous. a. Intentional: D’s conduct will be deemed “intentional” even if D does not desire to interfere with P’s use and enjoyment, as long as D knew w/Substantial Certainty, that such interference would occur. b. “Unreasonableness”: D’s interference with P’s interest must be unreasonable i. Two Tests for reasonableness: unreasonable if 1. Benefit v. Harm Test: Harm to P outweighs utility of D’s conduct; or 2. Great Burden to P Test: Harm caused to P is greater than P should be required to bear without compensation. a. [X: Bryant v LeFever -D builds a wall that blocks P's chimney. P sues for nuisance. RULE: P has no property right to the passage of air from his chimney. Property rights determine who has the nuisance] c. Nature of Neighborhood: nature of neighborhood is important factor in judging whether D’s conduct was unreasonable. The more industrial, the less likely the conduct will be found to be a nuisance. d. Location vs. Operation: Winget v. Winn-Dixie Stores divides nuisance analysis into two components: 1)nuisance by virtue of location and 2) nuisance according to manner of operation. i. Zoning: [Winget v. Winn-Dixie Stores, Inc – RULE: compliance w/zoning regulations is sufficient to absolve businesses from liability for nuisance based on location] 1. Nevertheless, even lawfully zoned business may constitute a nuisance if they are operated so as to unreasonably interfere with health and comfort of neighbors. [Winget v. Winn-Dixie Stores, Inc. -] ii. Operation: interferences onto P’s property, including wind from fans, floodlights, etc. are evidence that acts were not normal incidents of operation of the business. 1. [Winget v. Winn-Dixie Stores, Inc. -] D. Who can sue for private nuisance? a. Neighboring landowners: in general, only neighboring land owners can use for private negligence. b. Subsequent purchasers: Caveat emptor precludes subsequent purchasers from suing for private buisance resulting from the seller’s use of the property which was purchased. i. [Philadelphia Electric Co. v. Hercules, Inc. – above RULE: private nuisance usually protects neighbors, not subsequent purchasers. Here it failed because of caveat emptor. Simple to inspect the land] E. Remedies: P may be entitled to one or both remedies. a. 1. Damages: if harm has already occurred, P can recover compensatory damages. i. Continuing Nuisance: nuisance that causes harm, but which may be allowed to exist provided the party causing nuisance compensates aggrieved party for injuries. 1. IN IDAHO: “compensation need not be given to persons suffering from a continuing nuisance, if the benefit outweighs the harm.” Compelling dissent. a. [Carpenter v. The Double R Cattle Co., Inc. – P (landowner) sued D (cattle rancher) for odor and pollution. The jobs, and value to the community outweighed the nuisance and Idaho said P was not entitled to compensation.] Torts II: Outline Philip Larson Page 21 2. ELSEWHERE: A continuing nuisance may be remedied by the payment of permanent damages, particularly where the benefits of the activity outweigh the harm caused. a. [Boomer v. Atlantic Cement Co., Inc. – P (land owner) sued D (cement manufacturer) for nuisance of air pollution; sought injunction; RULE: a continuing intentional nuisance may be remedied by the payment of permanent damages, allowing the interfering activity to continue] DISSENT: this gives cement company power of eminent domain, which is bad. Courts don’t like giving this power to private individuals b. Analysis: perhaps a better solution would be compensating land owner on an ongoing basis for as long as the nuisance continued. This would incentivize manufacturer to get rid of nuisance, it would compensate injured party, and it would allow useful manufacturing to continue if it could afford the damages. ii. Diminution of property value not enough: you must prove that D unreasonably interfered with your land and diminution in property value is not alone sufficient. 1. [Winget v. Winn-Dixie Stores, Inc. – P (homeowner) sues D (grocery store) for nuisance of traffic, lights, and fumes. ] b. 2. Injunction: if P shows damages would not be a sufficient remedy, she may be entitled to an injunction against the continuance of the nuisance. This is the case when damages won’t adequately take into account the subjective value of the land use. F. Defenses: P’s conduct may give rise to defenses of contributory negligence and/or assumption or risk. a. Contributory negligence: where claim is based on D’s negligent maintenance of the nuisance, contributory negligence will normally be a defense. Where claim is based on D’s intentional private nuisance, it is not a valid defense. i. D’s Conduct Intentional Contrib. Negli. not a valid defense ii. D’s Conduct Negligent Contrib. Negl. is a valid defense. b. Assumption of Risk: generally applicable to nuisance cases and can bar recovery. i. “Coming to the nuisance”: defense arises where D claims P “came to the nuisance” with advance knowledge that the nuisance exists. Most states have passed “right to farm” statutes. 1. One factor considered: [Spur Industries, Inc. v. Dell E. Webb Development Co. – P, developer, buys land next to D’s cattle feed lot and sells some parcels to homeowners. Even though P came to the nuisance, the rights of innocent parties are at stake. D is forced to relocate. However, D can indemnify P to pay for relocation costs. RULE: Court says this is public nuisance. Even though P “came to the nuisance” D must relocate because D is the cheapest cost avoider] a. Problem w/this: the cheapest cost avoider is always ex-post. You don’t always know up front. Uncertainty has a very high cost. Even a bad rule is sometimes better because you can plan around it. G. COASE ANALYSIS a. ORIGINAL VIEW: Pollution externalities are an example of market failure. You can resolve market failure through government intervention through an efficient tax. b. COASIAN VIEW: market can handle this as well as the government. If you give the factory the property right to pollute, the town can pay them to stop at 2 units. Giving the property right to the town, the factory will pay them for the right to make two units. i. Assumes no transaction costs ii. [Fontainebleau Hotel Corp. v. Forty Five Twenty-Five, Inc – creating addition to hotel will block off the sun. There is no right to sunlight. Torts II: Outline Philip Larson Page 22 iii. [Calabresi v. Malavin – property rules vs. liability rules. Property rules give individual’s right to keep entitlement. Liability rules deny the asst holder the ability to keep the asset for himself. ??] 1.7 VICARIOUS LIABILITY 1.7.1 EMPLOYER-EMPLOYEE RELATIONSHIP A. Respondeat Superior Doctrine: If an employee commits a tort during the “scope of his employment” his employer will be liable (jointly with the employee). This is the rule of respondeat superior. Punitive damages can only be given if the employer did something. If they are only liable b/c employee did something they didn’t know about, no punitive damages. a. [Lundberg v. State -P (dead) killed when D’s employee hit him with her car on his way home from work; RULE: employer is not liable for negligence of his employee if negligence occurred outside scope of employee’s employment] b. [Fruit v. Schreiner – D (employee) struck P while driving from work convention to meet professional colleagues; RULE: employer is liable for employee’s negligence if it causes damage within the scope of his employment] c. Applies to all torts: The doctrine applies to all torts, including intentional ones and those in which strict liability exists, provided the tort occurred during the scope of employee’s employment. d. Rationale: 1) employer has control over activities of employee and is therefore in best position to prevent the damage; and 2) employer is in best position to bear the cost by obtaining insurance; 3) encourages employers to hire responsible employees; [Fruit v. Schreiner] B. Who is an employee?: Respondeat Superior is applied to all cases involving “employees”. But not to most cases involving “independent contractors.” a. Distinction: The main idea is that an employee is one who works subject to the close control of the person who hired him. An independent contractor, by contrast, though hired to product a result, is not subject to the close control of the person doing the hiring. i. Physical details: the control required to make a person an employee rather than an independent contractor is usually held to be control over the physical details of the work, not just the manner in which the work is turned out. 1. [Murrell v. Goertz – D (delivery boy) struck P after an argument. RULE: employer not liable for negligence of independent contractor; publishing company did not have a right to control the “physical details” of the work of the worker] C. Scope of Employment: Respondeat Superior applies only if employee was acting “within the scope of his employment” when the tort occurred. The tort is withi the scope of employment if tortfeasor was acting with an intent to further his employer’s business purpose. a. Trips from home: Most courts hold that an employee traveling from her home to work, is not acting in the scope of employment. Returning home after business, courts are divided. i. [Lundberg v. State -P (dead) killed when D’s employee hit him with her car on his way home from work; RULE: as a general rule, employee driving to work is not acting within the scope of employment] b. Frolic and detour: Even a detour for personal purposes may be found to be in the scope of employment if the deviation was “reasonably foreseeable”. i. [e.g. salesperson on a 2-hr trip to visit business prospect stops to buy a pack of cigarettes. Probably within scope of employment] [2-hr detour on a full day business trip probably not within scope of employment] Torts II: Outline Philip Larson Page 23 c. Forbidden Acts: even if act was expressly forbidden by employer, it will be “within the scope of employment” if done in furtherance of employment. i. [D, storekeeper, expressly orders clerk never to load gun while showing it to a customer. He does and customer gets hurt. Still “scope of employment” b/c it was in furtherance of the business purposes.] d. Intentional Torts: fact that the tort was intentional does not relieve employer of liability. i. Personal motives: If employee merely acts from personal motives he probably will be found to be working outside of his employment and employer will not be liable. 1.7.2 INDEPENDENT CONTRACTORS A. No general liability: one who hires an independent contractor is not generally liable for the torts of that person. a. [Murrell v. Goertz – D (delivery boy) struck P after an argument. RULE: employer not liable for negligence of independent contractor; publishing company did not have a right to control the “physical details” of the work of the worker] B. Exceptions: There are exceptions… a. Employer’s own liability: first, if the employer is negligent in her own dealings with independent contractor, this can give rise to employer liability. i. [e.g. D negligently selects subcontractor X and subcontractor hurts P] b. “General” Rule: if “independent contractor” is just a legal thing but everything else makes it “appear” like he is an employee, vicarious liability counts. c. Absolute duties: there are some duties deemed so important that the person doing them will not be allowed to delegate them to anyone. i. [Maloney v. Rath – D (driver) hit P because it was negligently repaired by X; RULE: driver could not delegate the duty to keep her brakes in good working order] ii. Examples of other non-delegable duties: 1) duty of general contractor to construct building safely; 2)duty of landowners to maintain their lands in a safe condition; 3) duty of employers to comply with Labor Code d. Inherently Dangerous Activities: one who employs independent contractor will also be liable where the work is such that, unless special precautions are taken, there will be a high degree of danger to others. 1.8 INVASION OF PRIVACY 1.8.1 PRIVACY A. Four Torts: the “invasion of privacy” cause of action is basically four distinct mini-torts, all involving P’s right to be left alone. The four are: 1) misappropriation of P’s name or picture; 2) intrusion on P’s solitude; 3) undue publicity of P’s private life; and 4) the placing of P in a false light. B. Misappropriation of identity: P can sue if her name or picture has been misappropriated by D for his own financial benefit. a. [Flake v. Greensboro News Co. – P (photographed model) sued for unauthorized use of photograph in baker (D) advertisement. D made a mistake and published full explanation. RULE: unauthorized commercial use of a person’s photograph gives rise to cause of action for “invasion of privacy”; only nominal damages] i. Note: without malice you often can only get nominal damages. C. Intrusion: P may sue if his solitude is intruded upon and this intrusion would be “highly offensive to a reasonable person.” You can be liable regardless of whether the information is published. Torts II: Outline Philip Larson Page 24 a. Examples: bugging a dwelling, tapping a telephone, or snooping through windows. b. Must be in a private place: This “intrusion upon solitude” is triggered only where a private place is invaded. Therefore, if D takes P’s picture in a public place, this will not normally be enough. c. Third Parties: A person who receives information obtained by intrusion is not liable for intrusion of privacy i. [Pearson v. Dodd – Senator Dodd (P) sued to columnists for publication of information stolen from his office by two of his employees; RULE: not liable for intrusion b/c this would “place too great a strain on human weakness to hold one liable…who merely succumbs to temptation”] D. Publicity of private life: P may recover if D publicized details of P’s private life. The effect must be “highly offensive to a reasonable person.” Protects the right to be free from unwanted publicity about person’s private affairs which, although true, would be offensive to ordinary people. a. Not of legitimate public concern: It is probably a requirement for the “publicity of private life” that the material not be of legitimate public concern. b. Public figure: someone who has thrust himself into the public spotlight only has a very limited right to be free from public disclosure. c. Public Record: An action may not be brought for public disclosure when the information involved already appears on public record [Cox Broadcasting Corp. v. Cohn – disclosure of the name of a rape victim; RULE: Sup. Ct. held freedom of press prohibited state from creating statute prohibiting disclosure of information on the public record.] E. False light: P can sue if he is placed before the public eye in a false light, and this false light would be “highly offensive to a reasonable person” a. Actual malice: Where P is a public figure, he can recover for “false light” only if he can show D knew the portrayal was false, or acted in reckless disregard of whether it was. 1.9 MISUSE OF LEGAL PROCEDURE 1.9.1 MISUSE OF LEGAL PROCEDURE A. Three torts: Three related tort actions protect P’s interest in not being subjected to unwarranted judicial proceedings: 1) malicious prosecution; 2) wrongful institution of civil proceedings; 3) abuse of process. B. Malicious Prosecution: To recover, P must prove that a. Elements: i. 1) D instituted criminal proceedings against him; ii. 2) that these proceedings terminated in favor of P (accused); iii. 3) that D had no probable cause; and iv. 4) Malice (that D was motivated primarily by some purpose other than bringing an offender to justice); v. 5) damages. 1. [Texas Skaggs, Inc. v. Graves -P (customer) sued D (grocery store) for malicious prosecution after she was absolved of liability for bouncing two checks; RULE: court outlines elements of malicious prosecution] b. Initial Proceeding: P must show that D took an active part in instigating and encouraging the prosecution. (e.g. if D attempts to persuade the prosecutor to prosecute, this will be sufficient) c. Favorable Outcome: The criminal proceedings must terminate in favor of the accused (P). An acquittal will be enough; so will a prosecutor’s decision not to prosecute (but a plea bargain to a lesser offense will not suffice) Torts II: Outline Philip Larson Page 25 i. [Texas Skaggs, Inc. v. Graves – P (customer) sued D (grocery store) for malicious prosecution after she was absolved of liability for bouncing two checks; RULE: an action for malicious prosecution can be maintained after criminal proceedings terminated in dismissal rather than acquittal] d. Absence of probable cause: P must show D lacked probable cause to institute the legal proceedings. i. Reasonable mistake: If D made a reasonable mistake, she does not lack probable cause. ii. Effect of outcome: the fact that P was acquitted does not itself establish lack of probable cause. D has the right to show, in the tort case, that P was guilty by preponderance of the evidence rather than beyond a reasonable doubt and that D therefore had probable cause. e. Improper purpose: P must show that D acted out of malice, or for some other purpose than bringing the offender to justice. f. Damages: satisfied by proving harm to reputation, humiliation, mental suffering, or any other injury that may give rise to damages in a civil action. C. Wrongful Civil Proceedings: in most states, a tort action exists for wrongful institution of civil proceedings. The requirements are the same as “malicious prosecution” action, except the original proceedings were civil rather than criminal. a. Elements: P must prove 1) D initiated civil proceedings against P; 2) D did not have probable cause to believe claim was justified; 3) proceedings were started for an improper purpose; 4) civil proceedings were terminated in favor of person against whom they were brought. b. Special Injury: some jurisdictions continue to follow the English rule requiring proof of special injury. [Friedman v. Dozorc – below] i. Requires pleading and proving an injury to present P’s fame, person, liberty or property. Some courts retain this requirement in order to avoid pushing the pendulum too far in favor of civil defendant. 1. [Friedman v. Dozorc – surgeon brings action for abuse of process and malicious prosecution of civil proceedings against attorney who filed malpractice claim on behalf of dead client] RULE A special injury remains an essential element of the tort for malicious prosecution in civil proceedings. Tort requires a) injury to fame; b) injury to ones person or liberty or c) injury to one’s property] D. Abuse of Process: occurs where a person involved in criminal or civil proceedings uses various litigation devices for improper purposes. a. [Friedman v. Dozorc -surgeon brings action for abuse of process and malicious prosecution of civil proceedings against attorney who filed malpractice claim on behalf of dead client; RULE: abuse of process claim requires a) ulterior purpose and b) an act in the use of process which is improper] b. [Grainger v. Hill – P (ship owner) sues D (mortgagee for imprisoning him and forcing him to relinquish his boat; sues for improper use of legal process; RULE: legal proceeding need not be terminated in favor of accused in order for accused to sue for abuse of process] 1.10 INTERFERENCE W/ADVANTAGEOUS RELATIONSHIPS 1.10.1 INTERFERENCE W/ADVANTAGEOUS RELATIONS A. Problem: This tort is good in that it encourages contracting parties to perform their obligations. It is bad because it is in tension with the K principle of efficient breach. Law wants to discourage needless and spiteful breaches of K but it does not want to interfere w/efficient breach nor w/the free market. B. Three torts: Three related torts protect business interests: 1) injurious falsehood; 2) interference w/contract; 3) interference w/prospective advantage. Torts II: Outline Philip Larson Page 26 C. Injurious Falsehood: protects P against certain false statements made against his business, product or property. “Trade libel” occurs when the person makes false statements disparaging Ps goods or business. a. Elements: P must prove the following elements. i. False Disparagement: D made a false statement disparaging P’s goods ii. Publication: P must show that the statement was published, as the word is used in defamation. iii. Scienter: P must show scienter on D’s part. P must show that D knew her statement was false, acted in reckless disregard of whether it was false, or (in some courts) acted out of ill-will or spite for P. iv. Special damages: P must show “special damages” such as that he suffered “pecuniary” harm. b. Defenses: D can raise the following defenses to trade libel. i. Truth: that the statement was true. ii. Privileges: any of the absolute and qualified privileges that can be raised in defamation may be raised by a trade libel D. iii. Fair competition: D was pursuing competition by fair means. In particular, D is privileged to make general comparisons between her product and Ps, stating or implying that her product is the better one. “Puffing” is protected, but if D makes specific false allegations about Ps product, D will not be protected. D. Interference with Existing Contract: protects P’s interest in having others perform existing contracts which they have with him. The claim is against one who induces another to breach a K with P. a. Rationale: encourages individuals to live up to their contractual obligations and discourages practices that will disrupt business dealings. i. [Lumley v. Gye – P runs theater and has K w/opera singer. D induces her not to perform K. RULE: D interfered with Ps K by inducing breach. This is a COA.] ii. [Bacon v. St. Paul Union Stockyards – P (livestock dealer) sues D (stockyards) for wrongful interference w/K saying they prevented him from doing his job. RULE: Interference w/K is actionable in tort.] b. Contracts to which this is inapplicable: i. Illegal Ks: if K is illegal or contrary to public policy, D may induce a breach of it. ii. At-will Ks: MAJORITY hold D is not liable for inducing one party to terminate it. iii. Contrary to Public Policy iv. Any unenforceable K: K’s with minors or those that lack consideration. c. Privileges: D can defend on the grounds that his interference was privileged. This happens a lot if D is acting for reasonable competitive purposes. i. Improper Interference: only improper interference is tortious. Rest. doesn’t spell out what is improper. 1. Factors include: [Adler, Barish, Daniels, Levin, and Creskoff v. Epstein –] a. 1. Nature of conduct b. 2. Motives c. 3. The interest they are trying to advance d. 4. Proximity of actions to interference e. 5. Relation between the parties. f. 6. Social interest in protecting the action [Brimelow v. Casson] ii. Business Competition: Ds desire to obtain business for herself, however, is not itself enough to make her privileged to induce breach of K. However, if P’s K is terminable at-will, D is privileged to induce a termination of it for the purpose of obtaining the business for herself. 1. [Adler, Barish, Daniels, Levin, and Creskoff v. Epstein – D, former law associate, attempted to get clients of P to switch to his law firm by sending them Torts II: Outline Philip Larson Page 27 a change of counsel form. RULE: it is tortious interference with K to do more than notify the clients that he started his own practice.] iii. Social Interests: D may be privileged if she is acting not primarily in furtherance of her own interests, but for valuable social interests. 1. [Brimelow v. Casson – P owned a traveling troupe but he paid his chorus girls very poorly and they became prostitutes. D induced them to cancel their Ks. RULE: D was acting for valuable social interests not for furtherance of his own interest.] E. Interference w/Prospective Advantage: Due to D’s interference, P loses the benefits of prospective, potential Ks, P can sue for interference with prospective advantage. a. Same rules: essentially the same rules apply as with interference w/K. The big difference is that D has a much greater scope of privilege to interfere. i. Competition: most importantly, Ds desire to obtain business for herself will be enough to give her a privilege, which is usually not the case where there is an existing K. 1.11 MISREPRESENTATION (“DECEIT”) 1.11.1 INTENTIONAL MISREPRESENTATION A. Definition: common law action of “deceit” or “fraud” corresponds to what we call today “misrepresentation”. a. Elements: P must establish the following: i. 1) a misrepresentation by ii. 2) Scienter – either knowledge of the statement’s falsity or reckless indifference to the truth. iii. 3) Intent to induce Ps reliance on the misrepresentation. iv. 4) Justifiable reliance by P v. 5) Damage to P, stemming from reliance. B. Misrepresentation: D must make a misrepresentation to P. Normally this will be in words. a. Actions: D’s actions can constitute a misrepresentation. b. Non-Disclosure: if D intentionally conceals a fact from P, he will be treated the same way as if he had affirmatively misstated the fact. If D fails to disclose a material fact, it is harder for P to establish a misrepresentation: i. Common Law: failure to disclose is almost never a misrepresentation. 1. [Swinton v. Whitinsville Savings Bank – P sues D for not disclosing termiteinfeeste state of house. RULE: absent some special relationship, mere concealment or nondisclosure of material facts is insufficient for misrepresentation] ii. Modern View: modern courts, the rule still is that failure to disclose is not itself a misrepresentation. However, some courts recognize exceptions in 1) fiduciary relationships (e.g. lawyer/client); 2) preventing a partial statement of the facts from being misleading; 3) newly acquired information that would make a previous statement misleading, etc. 1. [Griffith v. Byers Constr. Co. of Kansas – P successfully sues D for failing to disclose the defective soil condition of the property. No fiduciary relationship. RULE: party with knowledge has a duty to disclose material defects to parties who may be expected to act in reliance on the knowledgeable party’s nondisclosure.] C. Scienter: P must show that D 1) knew or believed he was not telling the truth, 2) did not have the confidence in the accuracy of his statement that he stated or implied he did; 3) knew that he did not have Torts II: Outline Philip Larson Page 28 the grounds for a statement that he stated or implied that he did. Modern rule no longer requires scienter. Negligent or Innocent Misrepresentation can still lead to liability. a. Negligence is not enough: In this case, negligent misrepresentation must be brought. See below… i. [Derry v. Peek – P (investor) sued D (chairman of corp.) for misrepresenting that using steam would give them an advantage. RULE: lacked scienter so no liability. a speaker who honestly believes a statement to be true, even if the belief is negligent, is not liable to the listener for misrepresentation. Statement must be made knowingly false, or 2) w/o belief in its truth, or 3) recklessly or careless about its truth] ii. Negligent misrepresentation (American Rule): 1. [International Products Co. v. Erie R.R. Co. P (IPC) insured Dock F instead of Dock D, where the expensive goods were located, based on D (RR) false statement. – RULE: imposes liability for negligent false statements that induce reliance based on a case-by-case determination of whether a duty should exist.] a. Factors: i. 1. knowledge that the information is required for a serious purpose. ii. 2. knowledge that the listener intends to rely on the statement iii. 3. an injury occurring because of the reliance. iv. 4. some relationship that would force them to have a duty to each other already. D. Third-Party Recovery: where the fraudulent misrepresentation was not made to P, but some 3rd party, the rules have changed. a. Common Law: D was only liable to those persons whom he intended to influence by his misrepresentation, and not to others, even though their reliance may have been foreseeable. b. Modern Rule: modern cases make it easier for 3rd party P to recover. Even if D did not intend to influence P, P can recover if she can show that 1) she is a member of a class which D had reason to expect would be induced to rely; 2) transaction was of the same sort that D had reason to expect would occur in reliance. E. Justifiable Reliance: P must show that he in fact relied on the misrepresentation and that his reliance was justifiable. a. Investigation by P: If, after receiving D’s misrepresentation, P makes his own investigation, and relies totally or almost totally upon this investigation, P will not have met the reliance requirement. However, if the misrepresentation was a substantial factor in inducing the reliance, P can recover even if his own investigation was also a substantial factor. b. Justifiability: P has no duty to investigate on his own, even where an investigation could easily be done, and would disclose the falsity of D’s statements. However, P may not overlook the obvious. If he does, reliance is not justifiable. i. [Williams v. Rank & Son Buick – D advertised car had air conditioning but it didn’t. P bought it. RULE: P cannot recover for an obviously false misrepresentation. Obviousness should be judged subjectively, looking at intelligence of the parties.] F. Opinion: it is hard for P to recover for a statement that is an “opinion.” a. Adverse party: it is especially hard for P to recover where D is an adverse party to P at the time of the misstatements. Even here, P may be justified in relying on D’s expression of opinion if 1) D purports to have special knowledge that P does not have and 2) D stands in a fiduciary relationship to P or 3) if D knows that P is especially gullible. i. “Puffing” is still not actionable: Puffing is not actionable. ii. [Saxby v. Southern Land Co. – P sues D for misrepresentation of quantity of timber on the land. RULE: statements of opinion do not give rise to liability for misrepresentation, as reliance on such statements is not justified.] Torts II: Outline Philip Larson Page 29 iii. [Vulcan Metals Co. v. Simmons Mfg Co. – vacuum salesman. RULE: statements of opinion made in conjunction with the sale of goods “puffing” rarely give rise to action for misrepresentation.] G. Prediction: If D predicts something will happen, this is generally treated as an opinion, meaning in most instances it cannot be relied on. But where D makes a statement as to her own intentions, this is generally treated as a factual representation that can be relied on. 1.11.2 NEGLIGENT MISREPRESENTATION A. Definition: At common law, there was no action for “negligent misrepresentation.” Unless P suffered personal injury or direct property damage (and therefore bring a conventional negligence action), P was out of luck. Today, however, most courts do allow recovery for negligent misrepresentation, even where only intangible economic harm is suffered. a. Same requirements: most requirements for a negligent misrepresentation action are the same as for an intentional misrepresentation action. b. MINORITY of courts allow recovery for innocent misrepresentation. Usually limited to sale of goods or property (not services). B. Business Relationship: Courts are quickest to allow recovery for negligent misrepresentation where D’s statements are made in the court of his business or profession, and D had a pecuniary interest in the transaction. a. Publishers: i. [Hanberry v. Hearst – P (woman), slipping in new shoes, sued D (Good Housekeeping) for misrepresenting quality of shoes. RULE: D may be liable for endorsing a product which proves to be defective and causes injury to a consumer. Question of fact for jury] ii. Exception: [Winter v. G.P Putnam’s Sons – P became ill after eating wild mushrooms book said were edible. RULE: publishers have no duty to guarantee the information contained in their books; content of books not subject to strict products liability] b. Real estate Developers: i. [Richard v. A. Waldman and Sons, Inc – P, relying on misrepresentation of D (real estate developer), purchased a home with zoning problems. RULE: negligent misrepresentation determined on case-by-case basis. Residential real estate developers have a duty to investigate the truthfulness of plot plans delivered to purchasers.] C. Liability to 3rd Persons: The maker of a negligent misrepresentation is liable to a much narrower class of 3rd party’s than is the maker of a fraudulent misstatement. a. Persons intended to be reached: D is liable to a limited group of people that D 1) intends to reach with the information or 2) whom D knows the recipient intends to reach. b. Negligent Misrepresentation by Auditors: i. MAJORITY: [Credit Alliance Corp. v. Arthur Andersen – P (lenders) not in privity with D (accountant), relied on negligently created financial statements. RULE: accountant may be liable to 3rd party who relies upon negligently prepared financial reports, but only if the relationship with the accountant and 3rd party is so close as to approach privity. ii. MINORITY: [Citizens State Bank v. Timm, Schmidt – P made loans in reliance on financial statements created by D. RULE: in Wisconsin, the absence of contractual privity does not preclude actions against accountants by people relying on negligently prepared financial statements] iii. Fraudulent misrepresentation: [Ultramares v. Touche – P relied on D’s written certification of their audit. P sued for fraudulent misrepresentation. RULE: accountant may be liable to 3rd parties not in privity for fraudulent misrepresentations in financial statements.] Torts II: Outline Philip Larson Page 30 1.12 DEFAMATION 1.12.1 DEFAMATATORY COMMUNICATION A. General: Defamation is actually two sub-torts, “libel” and “slander”. These both protect a person’s interest in his reputation. A state’s freedom to define these torts as it wishes is sharply curtailed by the First Amendment. a. Elements: to prove a case in either libel or slander, P must show: i. 1) False, Defamatory statement: a false and defamatory statement concerning him. ii. 2) Publication: A communicating of that statement to a person other than the plaintiff. iii. 3) Fault: fault on the part of D, amounting to at least negligence, and in some instances a greater degree of fault. iv. 4) Special Harm: either “special harm” of a pecuniary nature, or the actionability of the statement despite the non-existence of such special harm. 1. [Belli v. Orlando Daily Newspapers – P (famous attorney) sues D (newspaper) for saying he charged expensive clothes to hotel paid by FL Bar Ass’n. RULE: libel is written statement that is a) false, b) unprivileged, c) exposed person to distrust, hatred, contempt or ridicule, d) injured personal, social or business relations.] B. Injury to Reputation: to be defamatory, a statement must have a tendency to harm the reputation of the P. a. Reputation not actually injured: For a statement to be defamatory, it need not actually harm P’s reputation. It must simply be the case that, if the statement had been believed, it would have injured P’s reputation. b. [Grant v. Reader’s Digest Ass’n – P (lawyer) sued D (publisher) for saying he was a communist. RULE: statement may be defamatory if it injures a person’s reputation in the minds of some people, even if those people are not “right-thinking.”] C. Meaning Attached: Many statements can be interpreted in more than one way. Where this is the case, the statement is defamatory if any one of the interpretations which a reasonable person might make would tend to injure P’s reputation, and P shows that at least one of the recipients did in fact make that interpretation. a. [Belli v. Orlando Daily Newspapers – above. RULE: when statement is ambiguous, trier of fact must determine whether statement is defamatory] D. Reference to P: P must show that the statement was reasonably interpreted by at least one recipient as referring to P. a. Intent irrelevant: P does not necessarily have to show that D intended to refer to him. As a common-law matter, even if D behaved non-negligently and intended to refer to someone else, P can still sue. b. Groups: If D’s statement concerns a group, and P is a member of the group, P can recover only if the group is a relatively small one. [Neiman-Marcus v. Lait – women (382) couldn’t sue but men (25) could.] i. [Neiman-Marcus v. Lait – P (employees) sue D (author) for statements about their sexual activities and sexual preferences. RULE: where publication libels some, but not all people in a group, CL holdings conflict. In NY, a COA exists for individual group members] c. Reference need not be by name: if a non-explicit reference to P is reasonably understood as in fact referring to P, it does not matter that P is referred to by a different name or characterization. E. Truth: a statement is not defamatory if it is true. This is an absolute defense. At common law, D has the burden of proving truth. Torts II: Outline Philip Larson Page 31 a. Matters of public interest: today, P must bear the burden of proving falsity if: 1) D is a media organization; and 2) the statement involves a matter of public interest. b. Private figure, no public interest or non-media D: Probably the case that they will still require D to bear burden of proving truth. c. Substantial truth: for truth to be a barrier to recovery, it is not necessary that the statement be literally true. It is enough that the statement be substantially true. i. [Kilian v. Doubleday & Co. – P (colonel in WWII) sued D (publisher) for a false account of acts of cruel and unusual punishment allegedly inflicted by P. RULE: while substantial truth is an absolute defense to defamation, court should not instruct jury of defense if there is no evidence presented in support.] F. Opinion: a statement of pure opinion can never be defamatory. a. Implied facts: however, if a statement of opinion implies undisclosed facts, and a statement of those facts would be defamatory, the statement itself will be treated as defamatory. (e.g. “I think P must be an alcoholic” suggests there are implied facts about P’s alcohol consumption) 1.12.2 LIBEL vs. SLANDER A. Significance of Distinction: Only makes a difference to the requirement of special harm. To establish slander, P must show that he suffered pecuniary harm. To prove libel, by contrast, P does not have to show special harm. B. Libel: libel consists mainly of written or printed matter. a. Embodied in physical form: most states hold that it includes any communication embodied in physical form (e.g. computer tape, phonograph record). b. Radio and TV: where a program is broadcase on TV i. Written script: if it came from a written script, courts treat it as libel. ii. No Script: If program is ad-libbed, courts are split about whether it is libel or slander. 1. [Shor v. Billingsley – P sued D (television commentator) for libel in an ad-libbed statement televised nationwide. RULE: defamatory remark on televised program, even if ad-libbed and not read from script, can constitute publication of libel.] 2. Rationale: radio and TV can reach a large audience (even larger) than written publication. Therefore, a person can be even more harmed by broadcast than by written publication. Therefore, broadcast statements can be libel, which is easier to prove than slander. 3. NOTE: most states have statutes that say broadcast defamation should be treated as slander, even if read from a script. C. Slander: all other statements are slander. An ordinary oral statement for instance, is slander. Special harm is typically required. a. [Terwilliger v. Wands – D said P (male) was an adulterer and kept woman’s husband in prison. RULE: P must prove special damages in action for slander. Must show an injury to reputation that prevents P from receiving that which otherwise would be conferred upon him.] D. Special Harm: P may generally establish slander only if he can show that he sustained some special harm. Usually, this is pecuniary in nature. a. Slander per se: There are four kinds of utterances which, even though they are slander rather than libel, require no showing of special harm. i. Crime: statements imputing morally culpable criminal behavior to P. ii. Loathsome disease: statements that P suffers venereal disease. iii. Business, profession, trade or office: allegation that adversely reflects on Ps fitness to conduct her business, trade, profession or office. iv. Sexual misconduct: statement imputing serious sexual misconduct to P. Torts II: Outline Philip Larson Page 32 1. [Terwilliger v. Wands – RULE: CL says woman’s unchastity is slander per se. A male’s unchastity is not slander per se.] b. Libel: In the case of libel, common law courts don’t require proof of actual harm, and can award “presumed” damages. However, recent Supreme Court decisions cut back on states’ ability to do this. i. Matters of public concern: if the statement involves a matter of public concern or a public figure, and recovery is allowed w/o proof of actual malice, presumed damages may not be awarded. ii. Matter of private concern: If statement does not involve a matter of public concern, presumed damages may be allowed, even w/o showing actual malice. E. Publication a. Generally: P must show that defamation was published. Publication means seen or heard by someone other than P. i. Must be intentional or negligent: 1. [Economopoulos v. A.G. Pollard Co. – P (shopper) sued D (clerks) who called him a thief, one of them in Greek. Since no one that overheard understood, no publication. RULE: statement must be communicated to some one other than the person defamed, in order to be defamatory. Statement is only “communicated” if it can be understood by the listener (e.g. “Greek”.]